Transocean (RIG-2.2%) is lower despite the news that Borr Drilling will acquire its entire fleet of 15 jack-up drilling rigs in a deal valued at $1.35B.

Reports surfaced last week that the rigs could be acquired for $1.2B, and BMO Capital analyst Dan Boyd believes "some analysts grossly misinterpreted the news last week and did not account for the remaining new-build liability payments of more than $1.1B."

RIG still owes $1.1B in newbuild payments on its rigs, according to BMO, and Boyd doubts Borr's acquisition price of the rigs includes the lingering liabilities, "as that would imply Borr paying full replacement cost."

Evercore ISI's James West is much more upbeat, reiterating that it would be "aggressive buyers" of RIG the deal monetizes RIG’s under-utilized jack-up fleet and significantly reduces debt and capex.